Onity Group Inc. (NYSE: ONIT) completed a strategic transaction that will see its subsidiary PHH Mortgage divest 40,000 Ginnie Mae home‑equity conversion mortgage (HECM) loans with an unpaid principal balance of $9.6 billion. The loans will be transferred to Finance of America Reverse (FAR) under a three‑year subservicing agreement, while PHH will continue to securitize reverse‑mortgage buy‑out loans.
The sale is expected to generate net proceeds of $100 million to $110 million for Onity. The company plans to deploy the proceeds to support growth initiatives, reduce debt, and potentially fund a share‑repurchase program. CEO Glen Messina said the partnership “simplifies our business and enables us to concentrate our resources on maximizing the growth and earnings of forward originations and recapture, as well as our commercial and reverse subservicing activities.”
Onity’s Q3 2025 results provide context for the transaction. The company reported net income of $18 million and diluted earnings per share of $2.03, with revenue of $280.3 million—up $14.6 million or 5.5 % from the same period a year earlier. Originations volume reached $12 billion, a 39 % year‑over‑year increase, and the average servicing unpaid principal balance rose to $312 billion. Onity reaffirmed its full‑year 2025 Adjusted ROE guidance of 16 %–18 % earlier in the year. The sale also comes amid a Rithm Capital non‑renewal of subservicing agreements effective January 31 2026, which will affect approximately $33 billion of UPB.
The transaction aligns with broader industry consolidation trends, allowing FAR to expand its servicing platform and distribution channel for its proprietary second‑lien reverse mortgage product. For Onity, the divestiture removes a lower‑margin originations business, enabling a sharper focus on forward originations and higher‑margin subservicing that drive profitability. The deal is expected to be accretive to earnings and improve liquidity, and it is slated to close in the first quarter of 2026, subject to regulatory approval.
Onity’s net proceeds will strengthen its balance sheet, support future growth, and provide flexibility for potential share repurchases, reinforcing the company’s strategic shift toward a more streamlined, high‑margin servicing model.
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